stocks end lower; rupee weakens; o/n rates

KARACHI: Pakistani stocks ended lower on Wednesday, taking cues from the global markets and following a fall in international oil prices, dealers said.

The Karachi Stock Exchange's benchmark 100-share index ended 0.17 percent, or 20.79 points, lower at 12,317.15. Turnover was almost flat at 54.8 million shares, compared with 54.17 million shares traded on Tuesday.

"Amid a global sell off in equity markets and a fall in commodity prices, the local bourse continued to correct itself and ended 20 points lower," said Mohammed Millwala, a dealer at Topline Securities Ltd.

Dealers said that many investors were sidelined by a lack of positive triggers and the continued implementation of capital gains tax on certain investments.

The government confounded market expectations by not removing capital gains tax on certain investments in the 2011/12 budget, announced on June 3.

A 10 percent capital gains tax is imposed on stocks held for six months or less, and a 7.5 percent tax is levied on stocks held between 6 months to a year.

In the currency market, the rupee weakened to 85.80/85 to the dollar, compared with Tuesday's close of 85.75/79, following a rise in import payments.

The rupee hit a record low of 86.50 last month, but dealers said the local unit may be stable in the coming days because of increased remittances from Pakistanis working abroad.

According to official data, remittances sent by overseas Pakistanis crossed $10 billion for the first time, and were recorded at $10.1 billion in the first 11 months of the 2010/11 fiscal year, an increase of 25.20 percent compared with the same period last year.

In the money market, overnight rates rose to 12.50 percent, compared with the previous day's close of 11 percent and dealers expect rates to be on the higher side due to scheduled net outflows amounting to 40 billion rupees ($466 million) on Thursday.

Copyright Reuters, 2011